All about GST Registration for Goods Transport Agency (GTA) Services including ITC, RCM etc
In GST, Goods Transport Agency (GTA) services is always been a matter of confusion, dispute and ambiguities under present as well as under earlier laws.
More importantly, in GST, GTA service providers are still trying to understand on how GST shall impact them and whether they need to register under GST or not.
Let us try to understand it:
GTA under complete Reverse Charge Mechanism (RCM):
The government of India via notification no.13/2017 has been kept the GTA services under complete reverse charge. Reverse charge means that GTA is not liable to pay any tax rather the company which is the recipient of the services shall pay the GST in cash to the government.
In simple words, GTA service providers in respect of transportation of goods by road shall not be liable to pay GST.
Exemption from GST registration for GTA services:
If a person is providing only GTA services which are notified under reverse charge (as stated above), then GST registration is not required for them. Further, it is not the option but a regulation. Hence, the tax on GTA shall always be paid by the recipient and not by the GTA service provider.
In short, even if the GTA has a turnover of 100 crore, the GST registration shall not be required for them because they are under reverse charge mechanism suject to conditon mentioned hereunder.
GST tax rate on GTA service provider:
The GST tax rate for GTA services is 5% and shall be paid under reverse charge.
Input Tax Credit (ITC) of GST paid on GTA services under reverse charge:
The ITC on GST paid on GTA services under reverse charge shall be available to the person who is liable to pay the GST. This is because the GTA service is treated as input service and hence any tax paid on input service is available for ITC.
Case where GTA service is provided to unregistered dealer If in case the GTA services are provided to an unregistered dealer then GTA service provider shall be liable to pay GST and register himself under GST. Further, the GST tax rate shall be 5% in case he is not availing any ITC.
However, if he chooses to avail ITC, the tax rate shall be 18%.